Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—DAB DECISIONS: Long-term care facility properly fined for Medicare noncompliance, (Jun 3, 2026)

By Jody Coultas, J.D.

The facility was out of compliance with the regulations regarding pressure ulcer care.

The Palace Rehabilitation and Care Center, a New Jersey-based long-term care facility that participates in the Medicare program, was properly found to be out of substantial compliance with Medicare requirements, according to the HHS Departmental Appeals Board (DAB). CMS determined that the facility was not in substantial compliance and imposed a per-instance civil money penalty (CMP). The facility appealed the penalty. However, a DAB administrative law judge (ALJ) found that the facility was out of compliance with the quality-of-care regulation that addresses pressure ulcers and that the penalty imposed was reasonable (The Palace Rehabilitation and Care Center, DAB No. CR6802, Doc. No. C-22-369 (Dec. 16, 2025)).

Investigation. Surveyors from the New Jersey State Department of Health, Office of Long-Term Care conducted a COVID-19 Focused Infection Control survey and investigated a complaint. Based on that investigation, CMS determined that the facility was not in substantial compliance regarding quality of care (treatment/services to prevent/heal pressure ulcers) and cited a scope and severity level G (isolated instance of actual harm that is not immediate jeopardy). Specifically, a patient entered the facility with a pink area on her sacrum. Within a month, the pink area progressed to an open wound and further deteriorated to a stage 4 pressure ulcer, for which the patient required hospitalization. CMS imposed a per-instance civil money penalty of $12,515.

On appeal, the facility argued that it complied with the regulatory requirements by taking all necessary precautions to promote the wound’s healing and to prevent infection, but the deterioration was unavoidable.

Quality of care. The quality-of-care regulation at 42 C.F.R. § 483.25(b) requires that when dealing with pressure ulcers, a facility must ensure that: (1) A resident receives care, consistent with professional standards of practice, to prevent pressure ulcers and does not develop pressure ulcers unless the individual’s clinical condition demonstrates that they were unavoidable; and (2) A resident with pressure ulcers receives necessary treatment and services, consistent with professional standards of practice, to promote healing, prevent infection and prevent new ulcers from developing.

Treatment gaps. The DAB found that the undisputed evidence established that the facility was not in substantial compliance with Medicare program requirements because it failed to take all necessary precautions to promote the healing and prevent infection of the resident’s pressure ulcer. Despite a physician’s express order, the facility’s treatment records failed to document that the weekly skin checks were performed. Although the evidence reflected some periods of wound stability and improvement, the undisputed evidence also showed significant gaps in treatment. There were significant periods when no care was documented as ordered, and when ordered care was documented, it was delivered inconsistently. After the patient returned to the facility from the hospital, the proffered evidence showed that the facility failed to consistently follow the physician’s orders, and by October 2021, an MRI revealed decubitus ulcer with osteomyelitis for which the patient required IV antibiotics.

Penalty. The DAB found that CMS’s per-instance civil money penalty was reasonable. CMS imposed a per-instance CMP of $12,515, which is slightly higher than half the amount that CMS is authorized to impose for per-instance noncompliance. The facility argued that there was no basis for a penalty because it was not out of substantial compliance with Medicare program requirements. CMS had offered evidence showing a history of noncompliance, including a G-level deficiency related to pressure sores. Finally, the severity of the deficiency was significant. The seriousness of the deficiency, coupled with the facility’s history of noncompliance, justified the penalty amount.

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